What is Bundling?

Bundling as a marketing strategy is the combination of products or services into a single unique product or service and selling them as new ones. Bundling works well to both similar products and differentiated products and services that attract preference from a particular group of customers.

How does Bundling in Marketing Work? 

Multi-product and or multi-service companies are mostly faced with production dilemma of whether to sell a single product at a unit price or in bundles at the latter price. Price bundling continues performing a pivot role in numerous economic sectors including automotive, insurance, banking and software and others. Some companies based on bundling have developed new marketing strategies. Companies price their bundles at a relatively lower in Bundle pricing than would be if the products and services were singly sold. This provides discounts on all products and services to customers resulting in higher volumes of purchases and consequently to increased profit to companies. This also counters the opportunity loss in unit profit margin. It is advisable for customers to check the availability of bundling as some of the providers will highlight such. It is cost saving for consumers purchasing bundled services. For instance, even though home and auto are two insurance policies, it is probable for a customer to bundle the two policies together from a single company which is cheaper, in besides being more convenient means of bills payments in disregards to cost saving.

Why Bundling is a Consumer-Friendly Practice?

Bundling benefits consumers always even though most consumers primarily of young ages find it difficult taking the benefits of these bundle policies because their purchases is affected by their needs and will do so once the need arises. For example, most of the new car owners find their insurance policies from their parents agents, and it will take them long before changing. With time, when they buy and move to their new residence, the urge to change to a closer agent within their reach comes. This has cost many consumers even though many insurance provider companies are numerous encouragements to provide policies to each client. It is so because acquiring new customers is so expensive, more than six times than keeping the current ones. Consequently, Insurance companies invest in stronger incentives in selling new policies such as home and car insurance policies to their other existing policy holders.